An overview of the GRI standards

In our 2023 sustainability webinar series, Aletta BoshoffBDO's National Leader for ESG & Sustainability, explores some popular sustainability standards, goals and frameworks while sharing insights to help organisations on their sustainability journey. Here, we highlight the key themes from our event, Sustainability spotlight: GRI Standards.

Sustainability reporting is quickly becoming a prevalent force for driving positive change in organisations. Through the adoption of sustainability reporting, organisations not only enhance their credibility and stakeholder appeal but also showcase their commitment to sustainable development. The Global Reporting Initiative (GRI) standards provide one robust and popular path to achieve this. 

Here, we’ll unpack the purpose and scope of the GRI standards and how they empower organisations to embrace sustainability in innovative ways tailored to their unique sectors.

The utility of sustainability reporting for organisations

Sustainability reporting can bring a host of benefits to an organisation: by enhancing reputation, attracting stakeholders and building credibility. Sustainability reporting supports organisations to manage risks adeptly and systemically address pressing environmental and social challenges. Ultimately, the transparency and accountability that arise as a by-product of sustainability reporting serve as strong foundations for trust, and can also be a means to proactively stay ahead of pending regulatory requirements.

GRI Standards: Purpose and scope

Governed by the Global Sustainability Standards Board (GSSB), the GRI Sustainability Reporting Standards were first published in 2016, and are regularly reviewed to ensure they continue to reflect global best practices.  

These standards offer a universally accepted structure that assists organisations in effectively gauging, managing, and communicating their governance, economic, environmental, and social impacts. By adhering to the GRI Standards, companies can disclose pertinent information consistently and transparently, enhancing comparability among different organisations and industries.

The GRI Standards encompass a wide array of environmental, social and governance (or, ESG) matters, such as human rights, labour practices, biodiversity, energy and emissions. This comprehensive, all-encompassing approach ensures that businesses can evaluate and report on all significant facets of their sustainability performance.

Significantly, the GRI Standards are intended to be applicable to organisations of varying sizes and industries. Whether an organisation is a small local business or a multinational corporation, the GRI Standards offer a flexible framework that can be customised to fulfil specific reporting requirements. This inclusiveness enables companies across diverse sectors to participate in sustainability reporting and contribute to a more environmentally friendly and accountable future.

Implementation of the GRI Standards

To effectively implement the GRI Standards, businesses must establish a robust framework bringing into account the following factors.

Conducting a materiality assessment

When implementing GRI Standards, organisations will begin by conduct a materiality assessment. This process helps to identify the most relevant sustainability topics for the organisation to report, based on the significance of economic, environmental and social impacts. By focusing on material issues that affect stakeholders and long-term environmental performance, businesses ensure their reporting is targeted and meaningful.

Stakeholder engagement and alignment

Engaging stakeholders is a fundamental step in aligning with the GRI Standards. Organisations should actively involve employees, customers, investors, and communities to understand their sustainability expectations, concerns, and priorities. This engagement ensures that reporting addresses stakeholders’ information needs and reflects their perspectives.

Promoting transparency and accountability

Transparency is a cardinal principle of GRI Standards implementation. To build trust among stakeholders and enable informed decision-making, companies disclose accurate and comprehensive information about their sustainability performance, goals and progress.

Structure of the GRI Standards

The modular structure provided by the GRI Standards has emerged as the gold standard for sustainability reporting, providing a robust framework that guides organisations towards comprehensive and relevant reporting.
Under the GRI structure, Standards are categorised into three buckets, being:

  • Universal Standards – three areas of general disclosure that all organisations need to apply to their reporting
  • Sector Standards – particular standards addressing issues identified by the broader industry
  • Topic Standards – supports adequate reporting on the topics identified as material to the organisation.

GRI Standards
Figure 1 – GRI Standards’ modular system of interconnected standards

Sustainability reporting varies across industries, considering each sectors’ unique challenges and impacts. Based on these considerations, businesses must identify and prioritise relevant sustainability topics. For example, the energy industry may focus on carbon emissions, while the manufacturing industry may prioritise labour practices, and the agricultural sector may emphasise water management.

The GRI Standards recognise the sector-specific nature of sustainability reporting. They provide guidance on sector-specific disclosures and indicators, ensuring comprehensive coverage of topics across industries. Companies can effectively address their sustainability impacts and contribute to industry-wide progress by tailoring reporting to industry-specific challenges.

However, we know that not all organisations are identical, even within a sector. So, organisations must also address sustainability issues that are pertinent to them and their stakeholders. The Topic Standards enable the disclosure of non-industry-specific issues as identified through the materiality assessment.

Other considerations when implementing the GRI Standards

Once the relevant standards have been identified for reporting, organisations also need to consider the specific disclosures and structure of the report, including:

  • Core and comprehensive options: GRI Standards offer organisations the choice between:
    • Core reporting - covering minimal reporting requirements to understand the nature of the organisation, material topics and related effects, or
    • Comprehensive reporting - including additional disclosures for more extensive reporting on areas such as strategy, ethics and integrity, or governance.
  • Sections and components: The standards are organised into different sections, including economic performance, environmental impact, social practices and governance. Each section comprises specific components and indicators that guide businesses in measuring and reporting on their performance in these areas.
  • Materiality assessment: The process of choosing and revealing pertinent subjects through careful evaluation. This evaluation aids in recognising sustainability concerns that possess a substantial influence on both the organisation and its stakeholders. Consequently, it guarantees that reporting concentrates on the most crucial areas.

By offering organisations the flexibility to choose between the core and comprehensive options, the GRI Standards allow for the diverse reporting needs of different entities. This adaptability enables an organisation to tailor its sustainability report based on its specific priorities and the expectations of its stakeholders. The structured nature of the GRI Standards, with its sections, components, topics and sectors, ensures that no vital aspect of sustainability performance is overlooked, thus instilling confidence in the credibility and transparency of the reported information.

Notably, the GRI Standards also align with other frameworks and initiatives, for example, The United Nations’ Sustainable Development Goals, Taskforce for Climate-related Financial Disclosures, and SASB Standards, among others.

Guidance along your sustainability report journey

Ready to take steps toward addressing your carbon footprint in your sustainability report? BDO's National Sustainability Services team is here to provide expert guidance. With our in-depth knowledge of sustainability practices, we can assist your business in developing your sustainability report.

Contact us today to explore how we can help you navigate the complexities of sustainability reporting, ensuring that your efforts are impactful and aligned with industry best practices.